The November jobs report, a critical indicator for potential interest rate adjustments, largely propelled US stock markets upward on Friday. Investors interpreted the data as a signal for a likely rate cut in December and beyond.
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The S&P 500 (^GSPC) saw an approximate 0.3% increase, and the tech-focused Nasdaq Composite (^IXIC) climbed by roughly 0.8%, with industry giants like Amazon (AMZN), Apple (AAPL), and Meta (META) reaching new intraday highs. However, the Dow Jones Industrial Average (^DJI) experienced a slight decline of about 0.3%. These daily fluctuations mirrored the overall weekly performance: the Dow dipped 0.6%, the S&P 500 gained nearly 1%, and the Nasdaq surged over 3%.
November’s Employment Figures: A “Goldilocks” Scenario
The US economy added 227,000 jobs in November, exceeding expectations and signifying a recovery from October’s weather and strike-impacted figures. The unemployment rate saw a slight uptick to 4.2%. This “Goldilocks” report—positive yet not overly robust—alleviated economic concerns while allowing the Federal Reserve flexibility regarding future rate adjustments.
Market sentiment post-report shifted significantly, with the CME FedWatch Tool indicating a near-90% probability of a quarter-percentage point rate cut on December 18th, up from around 70% pre-report.
Bitcoin’s Ascent and Other Market Movers
Bitcoin (BTC-USD) maintained its upward trajectory, trading around $101,000 on Friday afternoon after briefly dipping. Options trading suggested some investors were hedging against potential pullbacks following Bitcoin’s historic surge past the $100,000 mark. This rally was partly fueled by anticipated support for digital currencies from President-elect Donald Trump, following his appointment of former PayPal (PYPL) COO David Sacks as a key advisor on AI and cryptocurrencies.
Beyond Bitcoin, strong earnings forecasts propelled shares of Lululemon (LULU) and Ulta Beauty (ULTA) upward.
Looking Ahead: Inflation Data and Corporate Earnings
Next week’s inflation report holds significant weight as a potential influencer of the Fed’s rate decision. A surprising surge in the Consumer Price Index (CPI) could prompt a reconsideration of the anticipated rate cut. Additionally, earnings reports from prominent companies like GameStop (GME), Macy’s (M), Costco (COST), and Broadcom (AVGO) will be closely monitored.
TikTok Ban Upheld: Implications for Tech Landscape
A US appeals court ruling upholding a ban on TikTok operating under Chinese ownership sent ripples through the tech sector. Shares of Meta (META) rose nearly 3% as the decision potentially removes a significant competitor. Other tech giants, including Alphabet (GOOG, GOOGL), parent company of Google and YouTube, also saw gains. While the ban’s future remains uncertain due to potential Supreme Court challenges and the incoming Trump administration’s stance, it presents a considerable shift in the social media and digital advertising landscape.
Market Wrap-Up: Trending Stocks and Consumer Sentiment
Several stocks experienced notable activity on Friday. Lululemon (LULU) surged after strong third-quarter results and an increased revenue forecast. Palantir (PLTR) gained over 5% on news of an AI partnership with Booz Allen Hamilton (BAH). Shopify (SHOP) benefited from a Loop Capital upgrade and Ulta Beauty (ULTA) rallied following positive earnings and a revised forecast.
Consumer sentiment data revealed rising inflation concerns, with one-year expectations reaching a six-month high of 2.9%. However, the overall consumer sentiment index improved to 74, boosted by positive views on durable goods purchasing, albeit driven by concerns about future price increases.
